Bank of Canada’s Macklem: US tariffs could roughly halve fourth-quarter growth to below 1%

Comments from Bank of Canada Governor Tiff Macklem cross the wires: If oil prices stay near $100 a barrel, we'd expect inflation to edge up in coming months Recent gas prices have been more consistent with an oil price almost $40 higher than where it has been We don't want to raise rates and restrain growth if inflationary pressures are contained When it comes to rate decisions, we need to look beyond the initial shock of higher oil prices There is growing evidence that many Canadian businesses have started to adapt to US tariffs Analysis: Macklem is highlighting the difficult balance facing the Bank of Canada. Tariffs could significantly weaken economic growth, while higher oil and fuel prices could push inflation higher in the coming months. That creates competing risks for monetary policy. For now, the message is cautiously neutral. The Bank does not want to raise rates in response to a temporary oil-price shock, particularly with growth already under pressure. However, policymakers will be watching closely for evidence that higher energy costs are spreading into other goods and services. If those second-round inflation pressures begin to appear, the Bank may have to respond despite the weaker growth outlook. This article was written by Greg Michalowski at investinglive.com.